Bears took charge at D-Street on Thursday as fresh trade war concerns and mixed April-June quarter earnings eroded investors' confidence. Heavy selling was witnessed across the board with stocks of public sector banks, automobiles and metals slipping the most.
The benchmark S&P BSE Sensex closed 318 points, or 0.81 per cent, lower at 38,897 level with YES Bank, Tata Motors, ONGC, and Maruti being the top laggards. In an otherwise weak market, only HDFC, HDFC Bank and ITC remained the top gainers. The broader Nifty50, too, ended at 11,597 mark, down 91 points, or 0.78 per cent.
In the broader market, S&P BSE MidCap closed 179 points, or 1.23 per cent lower at 14,364 level while the S&P BSE SmallCap lost 158 points, or 1.15 per cent, to settle at 13,558 level.
Sectorally, PSU Banks slipped the most with the index closing 3.18 per cent lower. This was followed by Nifty Auto index (down 2.74 per cent) and Nifty Metal index (down 2.46 per cent). Nifty Financial Servcies index closed 0.11 per cent higher.
BUZZING STOCKS
Shares of YES Bank plunged up to 15 per cent to Rs 84 per share iin early morning deals on the BSE on Thursday after the private sector lender reported 91 per cent YoY decline in net profit in the April-June quarter of financial year 2019-20. The stock was trading at its lowest level since April 21, 2014. READ MORE
Shares of Mindtree plunged 10 per cent to Rs 675, also its fresh 52-week low, in Thursday's early morning trade on the BSE, after the company’s consolidated net profit more than halved to Rs 93 crore in June quarter (Q1FY20), as compared to previous quarter. It had reported a profit of Rs 198 crore in the March quarter (Q4FY19). READ MORE
GLOBAL CUES
Global shares slipped on Thursday on growing signs that a trade dispute between the United States and China was taking a toll on corporate earnings, with nerves spreading from Wall Street through Asia to European markets.
Japan's Nikkei index ended 2 per cent lower while South Korea's Kospi lost 0.31 per cent. China's Shanghai Composite, too, slipped 1.04 per cent.
(With inputs from Reuters)
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The S&P BSE Sensex declined 318 points or 0.81 per cent to settle at 38,897 levels while the NSE's Nifty50 index lost 91 points or 0.78 per cent to end at 11,597.
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The relations between the two promoter camps had gone sour recently over decision making and corporate governance issues. Gangwal has accused Bhatia of indulging in Related Party Transactions (RPT) in favour of InterGlobe Aviation Enterprise (owned by Bhatia).
“Overhang of the battle will remain… As we are not aware about the details of the agreement between the two, risks of government intervention have increased and one of them is likely to take legal course,” says Gagan Dixit, Vice- President, institutional equities, Elara Capital. READ MORE
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The approved product is a generic therapeutic equivalent version of Cyklokapron injection, 100 mg/ml of Pharmacia and Upjohn Company.
Caplin Point Laboratories said Tranexamic Acid Injection is administered in patients with hemophilia for short-term use to reduce or prevent hemorrhage and reduce the need for replacement therapy during and following tooth extraction.READ MORE
2:16 PM IST
A record number of retail investors are holding YES Bank, with one out of every five equity share held by them. Retail investors increased their stake in the private sector lender by 6.5 percentage points during the April-June 2019 quarter (20.46 per cent stake against 13.96 per cent holding at the end of March 2019 quarter).
Retail investors are individuals who hold up to Rs 200,000 of share capital in a company. READ MORE
The S&P BSE Sensex declined 318 points or 0.81 per cent to settle at 38,897 levels while the NSE's Nifty50 index lost 91 points or 0.78 per cent to end at 11,597.
MARKET CHECK | 27 out of 30 stocks in the S&P BSE Sensex trade in the red
MARKET CHECK | Titan slips nearly 3%
IndiGo Q1 preview: Jet closure, oil price fall to drive earnings
The relations between the two promoter camps had gone sour recently over decision making and corporate governance issues. Gangwal has accused Bhatia of indulging in Related Party Transactions (RPT) in favour of InterGlobe Aviation Enterprise (owned by Bhatia).
“Overhang of the battle will remain… As we are not aware about the details of the agreement between the two, risks of government intervention have increased and one of them is likely to take legal course,” says Gagan Dixit, Vice- President, institutional equities, Elara Capital. READ MORE
NEWS ALERT | India Ratings revises outlook on IDFC Bank's senior debt to negative; rating affirmed at AA+: CNBC TV18
Nifty Realty is trading lower
Sun Pharma Advanced Research climbs 9%
Caplin Labs gets USFDA nod for injection to prevent excessive blood loss
The approved product is a generic therapeutic equivalent version of Cyklokapron injection, 100 mg/ml of Pharmacia and Upjohn Company.
Caplin Point Laboratories said Tranexamic Acid Injection is administered in patients with hemophilia for short-term use to reduce or prevent hemorrhage and reduce the need for replacement therapy during and following tooth extraction.READ MORE
Retail investors' stake in YES Bank at record high of 20% in June quarter
A record number of retail investors are holding YES Bank, with one out of every five equity share held by them. Retail investors increased their stake in the private sector lender by 6.5 percentage points during the April-June 2019 quarter (20.46 per cent stake against 13.96 per cent holding at the end of March 2019 quarter).
Retail investors are individuals who hold up to Rs 200,000 of share capital in a company. READ MORE
Monsoon rains below average in past week, raising crop worries: Reuters
India’s monsoon rains were 20% below average in the week ending on Wednesday, the weather office said, as summer showers turned patchy over the central, western and southern parts of the country, raising concerns over the progress of crop plantings. Overall, India has received 16% below average rain since the monsoon season began on June 1.
Monsoon rains are crucial for farm output and economic growth in India, where about 55% of all arable land is reliant on rainfall and the farm sector employs nearly half of the country’s 1.3 billion people. India typically receives 75 percent of its annual rain from the June-September monsoon as moisture-laden winds sweep in from the southwest of the peninsula.
Reliance Industries down over 1%
NEWS ALERT | DB Corp Q1 results: Consolidated revenue down 4% at Rs 607 cr
-- Profit down 3.9% YoY to Rs 93.7 cr
-- EBITDA up 4.5% to Rs 175.5 cr
-- Margin up 230 bps to 28.9%
Colgate gains after Q1 results announcement
NEWS ALERT | Colgate Q1 results: Net profit slips 10.8% YoY to Rs 169.1 cr
-- Revenue up 4.2% to Rs 1,085 cr
-- Ebitda up 6.5% to Rs 300 cr
-- Margin up 60 bps to 27.6%
Sharp fall in Thomas Cook
MARKET CHECK
NEWS ALERT | BHEL bags order worth Rs 750 cr for emission control system: CNBC TV18
NEWS ALERT | Caplin Point’s Caplin Steriles gets US FDA approval for Tranexamic Acid Injection
VA Tech Wabag rises over 5%
CARE Ratings slips 5% after Co sends MD Rajesh Mokashi on indefinite leave
In a late night exchange filing, the ratings agency said that till the completion of the examination of an "anonymous complaint" received by the market regulator, the board has decided to send Mokashi on leave "with immediate effect until further notice".
"The Board has (also) decided to appoint Mr T.N. Arun Kumar, currently Executive Director (Ratings) as Interim Chief Executive Officer of the company... He will not be part of Rating Operations to ensure independence of ratings," it said. READ MORE
Shares of Mindtree plunged 10 per cent to Rs 675, also its fresh 52-week low, in Thursday's early morning trade on the BSE, after the company’s consolidated net profit more than halved to Rs 93 crore in June quarter (Q1FY20), as compared to previous quarter. It had reported a profit of Rs 198 crore in the March quarter (Q4FY19). Operational revenue declined 0.3 per cent to Rs 1,834 crore from Rs 1,839 crore. On constant currency (CC) term, revenue grew 1.1 per cent on sequential basis. READ MORE
Torrent Pharma dips over 4%
Nifty Auto index slips in trade further
Wipro pares losses, trades 3% higher
YES Bank tanks 15% as June quarter net profit slumps, bad loans mount
Shares of YES Bank plunged up to 15 per cent to Rs 84 per share iin early morning deals on the BSE on Thursday after the private sector lender reported 91 per cent YoY decline in net profit in the April-June quarter of financial year 2019-20. The stock was trading at its lowest level since April 21, 2014. YES Bank reported a 91 per cent decline in its net profit at Rs 113.8 crore in Q1FY20, from a profit of Rs 1,260 crore in Q1FY19, due to mark-to-market provisioning of Rs 1,109 crore for bad loans and decline in non-interest income. READ MORE
MARKET CHECK
GTPL Hathway gains over 6%
Nifty Metal index is trading 1.3% lower
Adani Power climbs 3%; top gainer in S&P BSE MidCap index
DHFL gains after saying it'll announce audited earnings for Q4 and FY19 on July 22
DFM Foods surges 14%
DHFL gains over 3%
Tata Steel dips 0.83%
CG Power and Industrial Solutions is trading 9% higher
Bharat Forge slips over 3%
Punjab & Sind Bank dips 5%
HDFC hits 52-week high
SpiceJet zooms over 3%
Mihindra Lifespace Developers adds 0.8%
DFM Foods soars over 14%
Tata Motors slips 1.3%
Torrent Pharma sheds nearly 4%
CARE Ratings slips over 3% after agency sends CEO on leave
Crisil tgains 3% higher
Broader market check
Bharti Airtel trades over 1% higher
Allahabad Bank dips over 2%
Jet Airways trades over 4% higher
IndiGo trades flat with negative bias
Maruti trades mildly lower
Wipro trades higher post Q1 results
MindTree slips 8% on weak Q1 nos
YES Bank tanks 10%, hits 5-yr low on 91% drop in PAT
Top gainers and losers on S&P BSE Sensex at opening
Sectoral trends on NSE at this hour
Market at open
Market at open
NEWS ALERT | India receives 20% lower rainfall than average in the week to July 17: Met Dept
MindTree slips 9% in Pre-open on weak Q1 nos
YES Bank tanks 10% in Pre-open trade
Top gainers and losers on S&P BSE Sensex during Pre-open trade
Market at pre-open
Rupee opening
Rupee opens higher at 68.76/$ vs Wednesday's close of 68.81 against the US dollar
Market at pre-open
Antique Stock Broking on YES Bank
Recommendation: HOLD
Last Close: Rs 98
Target Price: Under Review
YES Bank's reported yet another weak quarter on asset quality with gross slippages of INR62bn and NNPL increase of 50% QoQ. High net slippages from outside the watch-list (INR20bn+, though these exposure were included in BB and below rated pool) and consequent sharp increase in BB and below rated pool to INR295bn (9.4% of the exposure vs. INR220bn in 4Q) disappointed. YES maintained its credit cost guidance of 125bps for FY20, but this excluded investment related provisions of INR11bn (20-30% provided) on two NBFCs. Hence, with sharp increase in stress pool and exclusion of investment related provisions, comfort on guidance is low. With CET 1 of 8%, equity infusion at current stage become important and would provide room for absorption of credit risk. Thus, bank's performance becomes highly contingent to resolution of some of these large exposures to promoter group entities/corporate deleveraging and capital support. Therefore, despite significant correction in the stock price and low valuation of 0.8x FY20BV we believe uncertainties are high and put our rating Under Review.
Antique Stock Broking on Wipro
Recommendation: HOLD
Last Close: Rs 260
Target Price: Rs 255
Wipro has started 1QFY20 on a disappointing note and 2Q guidance also implies muted growth going forward. While FY20 revenue growth could be better than FY19, it would still be lagging its peer group. Wipro is restructuring the IT services business to make it more predictable and profitable; this is evident in the divesture of its data centre business, carving out of part of India business, and divestment of Workday and cornerstone business that the company has done in the last few quarters. We believe these efforts will take some time to reflect positively on the numbers. Our estimates are largely unchanged and we maintain HOLD on the stock with a target price of INR255, based on 14x FY21 EPS as, we believe, the valuations are expensive against the muted growth trajectory.
3 key FPI proposals can help bring in $25 bn foreign cash: Morgan Stanley
The domestic equities market could expect an overseas flow bonanza to the tune of $25 billion (Rs 1.72 trillion at the current exchange rate) if the government is able to implement three key proposals pertaining to foreign portfolio investors (FPIs).
These include increasing the public float in listed companies to 35 per cent from 25 per cent, increasing the minimum statutory limit for FPI investment in a firm from 24 per cent to the sectoral foreign investment, and lowering government holding in listed public sector undertakings. READ MORE
Bhatia vs Gangwal: IndiGo headed for a stormy board meet on Friday
In normal circumstances, the meeting on July 19 would have been a happy rendezvous between the architects of IndiGo. The country’s most profitable airline is expected to register its highest profit—more than Rs 1,000 crore. But on Friday, Rahul Bhatia and Rakesh Gangwal — the founders of IndiGo — will possibly face each other with deep mistrust, which the board chairman, M Damodaran, will attempt to defuse. READ MORE
Illustration by Ajay Mohanty
Stocks to watch: PSU banks, ACC, DB Corp, L&T Infotech, Wipro, Mindtree
Here's a look at the top counters that are likely to trade actively in today's session -
PSU banks: In a big relief for banks, the government is bringing in multiple reforms to the three-year-old Insolvency and Bankruptcy Code (IBC), providing clarity about preference to secured lenders over operational creditors, to be applicable retrospectively; strict timelines for the resolution and litigation process; and powers of the committee of creditors (CoC).
Mindtree: Mid-sized IT firm Mindtree Wednesday posted a 41.4 per cent rise in consolidated net profit to Rs 92.7 crore for the quarter ended June 30. Its revenues rose 11.9 per cent to Rs 1,834.2 crore in the quarter as compared with Rs 1,639.5 crore in the year-ago period. READ MORE
Bullish govt bonds reflect slowdown in global and domestic economies
While government bonds have rallied in the recent past on domestic rate cut expectations and comfortable liquidity, the rupee has remained relatively choppy. The currency is mirroring the equity market, reflecting a slowdown in the global and domestic economies. Indeed, global bond yields have fallen quite substantially, with some in Europe hitting sub-zero levels, an early sign of a global slowdown. READ MORE
Investigators may grill banks on closure of Jet Airways' forensic audit
Investigative agencies examining the books of Jet Airways are likely to seek an explanation from the State Bank of India (SBI)-led consortium after the lenders “closed” the forensic audit report on the basis of the “more-than-adequate” responses by the grounded airline. “Banks have shared the forensic audit report with the Enforcement Directorate (ED) and the Serious Fraud Investigation Office (SFIO). READ MORE
Narnolia Financial Advisors on IndusInd Bank
Recommendation: Accumulate
Target Price: Rs 1,714
Post-merger with BFIL, NIM of IIB is likely to get boost, further with ease of interest rates in the market will also improve the margin due to fixed interest rate nature of consumer finance book. Credit growth is likely to face moderation, exposure of 1.67% towards stressed assets and progression towards succession planning creates headwinds for IIB in near term, we maintain our target price of Rs 1714 at 2.3x BV FY21E with ACCUMULATE rating.
Kotak Securities on Praj Industries
Praj Industries Ltd
Recommendation: ADD
Target Price: Rs 139
Since the opportunity size is large in Bio CNG and 2G ethanol, we believe that the stock valuations could continue to be resilient. We thus value the stock at 23x FY21E (average PE of 24x) and arrive at a price target of Rs 139 (Rs 146 earlier), which provides upside of 10% from current levels. We maintain our “ADD” rating on the stock given moderate upside.
Sebi chief questions Budget plan for transfer of surplus funds to govt
In a letter to the ministry on July 10, Tyagi said the proposed move, part of the Finance Bill, 2019, would affect the functioning of Sebi as well as the securities market. He said the proposal was already being discussed by the Financial Stability and Development Council (FSDC), regulator for the financial sector, and that the amendment to the Sebi Act, through the Finance Bill, could have waited until the Council's final decision. Tyagi argued on the rationale for the regulator keeping a reserve fund and its importance in protecting the interests of investors. READ MORE
Govt clears changes to insolvency law; secured lenders to get preference
Lenders and legal experts say that the amendments, especially regarding the treatment of operational creditors, will help end the uncertainty around recovery for the financial creditors of Essar Steel.
“The amendments aim to fill critical gaps in the Code and clarify the intent of the law,” Union minister Piyush Goyal said during the Cabinet briefing on Wednesday. READ MORE
Steel stocks still under the pump, rising iron ore prices pose threat
News of the government recommending anti-dumping duty for aluminium and zinc-coated flat steel products has failed to lift the stock prices of steel majors. Tata Steel, JSW Steel, SAIL, Jindal Steel and Power (JSPL) all continued their downtrend and are trading 11-19 per cent lower since the end of April. READ MORE
Foreign investors pull out Rs 6,000 cr in July as selling spree continues
The government has proposed to levy a surcharge of 25 per cent on incomes between Rs 2 crore and Rs 5 crore and 37 per cent on income above Rs 5 crore. While the higher surcharge has been originally aimed at the ultra-rich, foreign portfolio investors (FPIs), especially those with non-corporate structures, are caught in the crosshairs.
Market players said the tax proposal has impacted FPI participation, particularly those who actively trade in the futures and options segment. READ MORE
Nifty outlook and top stock picks by CapitalVia: Buy HDFC, Ultratech Cement
HDFC
Recommendation: BUY
Target: Rs 2,350
Stop loss: Rs 2,256
The stock is in a continuous bullish trend. The level above 2,290 would also result into a multiple breakout on the charts as there is no real resistance above 2,300.70. Moving average and Oscillator setup is bullish on the short-term and medium-term charts.
Considering the technical evidence discussed above, we recommend buying the stock at Rs 2,290 for the target of Rs 2,350, keeping a stop loss at Rs 2,256 on closing basis. READ MORE
Buy and sell ideas by Sacchitanand Uttekar of Tradebulls Securities
Seasonality data indicates that historically July has yielded positive returns in seven out of 10 instances since 2009 with an average return of close to 3 per cent and a bullish reversal from here-on could result in sharp an upside momentum kicking in while a move below 11,600 levels would commence a corrective move targeting the gap support placed around (11,406-11,426). It’s prudent to book profits for any existing shorts and wait for upside momentum to kick-in in coming sessions to build longs with a stop placed below 11,600 as presumption of reversal for larger move on the upside remains intact. READ MORE
NEWS ALERT | Japan's exports fall 6.7% YoY in June: Reuters
-- Japan’s exports fell for a seventh straight month
-- Manufacturers’ business confidence hits a three-year low